UNITED STATES v. DISTRICT COUNCIL OF NEW YORK CITY

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

February 3, 1992

UNITED STATES OF AMERICA, Plaintiff, against DISTRICT COUNCIL OF NEW YORK CITY AND VICINITY OF THE UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, FREDERICK W. DEVINE, President, JOHN R. ABBATEMARCO, First Vice President, GEORGE J. ALBERT, Second Vice President, ROBERT J. CAVANAUGH, Secretary-Treasurer, PASCHAL McGUINNESS, former President, IRVING ZEIDMAN, former First Vice President, FRANCIS J.P. McHALE, former Secretary-Treasurer, ANTHONY SALERNO, a/k/a "Fat Tony", VINCENT DiNAPOLI, LOUIS DiNAPOLI, PETER DeFEO, ALEXANDER MORELLI, a/k/a "Black Alex", LIBORIO BELLOMO, a/k/a "Barney", Defendants.

District Council argues that Judge Katz erred when he found that Bush and Anikstein still faced a risk of prosecution. Defendant contends that the government has obtained the testimony of Bush and Anikstein under grants of immunity and has prevented the District Council from taking testimony by refusing to state that Bush and Anikstein are not under investigation. District Council argues that the federal prosecutors have had access to the state immunized testimony because a state prosecutor, Martin C. Aronchick, is a Special Assistant United States Attorney in this case and because prosecutors immunized the testimony of these witnesses at the criminal trial of Paschal McGuinness. It is the District Council's position that the government can never prosecute these witnesses because it can never show that federal charges do not stem from the immunized state testimony. Consequently, defendant contends, the government is using the assertions of fifth amendment immunity as a ruse to frustrate defendant's discovery.

District Council argues that the government's use of immunized testimony given to the state grand jury is revealed by including allegations in the Supplemental Complaint based on that testimony. See United States v. North, 285 App. D.C. 343, 910 F.2d 843, 853-73, modified, 920 F.2d 940 (D.C.Cir. 1990), cert. denied, 111 S. Ct. 2235 (1991). District Council contends that the government will never be able to demonstrate that it is prosecuting Bush and Anikstein on the basis of information not derived from the immunized testimony. See Kastigar v. United States, 406 U.S. 441, 461, 32 L. Ed. 2d 212, 92 S. Ct. 1653 (1972); United States v. Tantalo, 680 F.2d 903, 907 (2d Cir. 1982).

The government responds that it has taken no position on the witnesses' assertions of the fifth amendment privilege but asserts that these witnesses could be prosecuted in the future. The government contends that a witness who is compelled to give immunized state testimony may be prosecuted if federal prosecutors can show that the evidence they plan to use "is derived from a legitimate source wholly independent of the compelled testimony." Kastigar, 406 U.S. at 460. The government notes that the Supreme Court has explicitly disapproved a court predetermining the Kastigar issue at the time of civil testimony. Pillsbury Co. v. Conboy, 459 U.S. 248, 261, 74 L. Ed. 2d 430, 103 S. Ct. 608 (1983). The government rejects the proposition that federal prosecutors have had access to immunized testimony and argues that even if they have, the Court cannot predetermine the issue of a future prosecution. The government concurs with the Judge Katz's conclusion that federal transactional immunity has not been conferred and argues that the Court cannot grant immunity. The government also represents that it has not decided which witnesses it will immunize but that if it does immunize any witnesses it will give defendants access to those witnesses. Government's Memorandum of Law In Response to Defendants' Objections ("Gov. Mem.") at 6-14.

The Court cannot grant immunity because that is exclusively an executive function. United States v. Salerno, 937 F.2d 797, 807 (2d Cir. 1991), cert. granted, 60 U.S.L.W. 3498 (U.S. Jan. 21, 1992). The Court cannot compel a witness in a civil action to give incriminating testimony without immunity because "at no time has the Supreme Court ever accepted anything less than a duly-authorized grant of statutory use and derivative use immunity as a substitute for the protections of the fifth amendment." Andover Data Services v. Statistical Tabulating, 876 F.2d 1080, 1083 (2d Cir. 1989). The Supreme Court stated that its holding in Pillsbury would preclude "district courts from compelling testimony in a civil deposition over a valid assertion of the Fifth Amendment privilege, absent a specific assurance of immunity for such testimony." Pillsbury, 459 U.S. at 264 n. 24.

Pillsbury is directly on point and was appropriately relied upon by Judge Katz. I see no reason to disturb that portion of the Order and Opinion that denied the District Council's motion to compel.

Motion for Stay

Defendant Paschal McGuinness moves under Rule 72, Fed. R. Civ. P. for an order setting aside Judge Katz's Order and Opinion denying a stay of discovery as to McGuinness and for a hearing to determine whether the Civil and Criminal Divisions of the United States Attorneys' Office are acting in concert to force McGuinness to invoke his fifth amendment privilege. The complaint in this civil case was filed in September 1990 and supplemented in July 1991. McGuinness was indicted on November 29, 1990 in a five count indictment charging him with one count of conspiracy to violate the Taft-Hartley Act and four counts of substantive violations of the Taft-Hartley Act. On July 24, 1991 McGuinness was acquitted on all counts. After his acquittal McGuinness initially withdrew his motion for a stay in the civil case but when the United States Attorney's Office refused to state that McGuinness was no longer under investigation, he rejoined the motion for a stay. Affirmation of Dominic Amorosa, Esq. dated November 21, 1991 paras. 2-3.

The government responds that the defendants' mere fear of future criminal prosecution does not allow them to evade civil discovery. The government argues that the defendants' position means that simultaneous civil and criminal proceedings would never be feasible, a result the Supreme Court rejected in United States v. Kordel, 397 U.S. 1, 25 L. Ed. 2d 1, 90 S. Ct. 763 (1970). The government notes that district courts, including this one, have refused stays in civil actions even where criminal proceedings are actually pending. See S.E.C. v. Musella, 38 Fed. R. Serv. 2d (Callaghan) 426 (S.D.N.Y. 1983) (grand jury investigation). In the government's view the choice of testifying or asserting the fifth amendment privilege is one that courts have repeatedly refused to alleviate. See United States v. Simon, 373 F.2d 649, 653 (2d Cir.), cert. granted, 386 U.S. 1030, 18 L. Ed. 2d 591, 87 S. Ct. 1477, vacated as moot, 389 U.S. 425, 19 L. Ed. 2d 653, 88 S. Ct. 577 (1967). The government concludes by endorsing Judge Katz's holding that further delay should not be countenanced in this case because there is a substantial public interest in the speedy resolution of this case involving alleged union corruption. Gov. Mem. at 14-19.

Other than where there is specific evidence of agency bad faith or malicious government tactics, the strongest case for deferring civil proceedings until after completion of criminal proceedings is where a party under indictment for a serious offense is required to defend a civil or administrative action involving the same matter. The noncriminal proceeding, if not deferred, might undermine the party's Fifth Amendment privilege against self-incrimination, expand rights of criminal discovery beyond the limits of Federal Rule of Criminal Procedure 16(b), expose the basis of the defense to the prosecution in advance of criminal trial, or otherwise prejudice the case. If delay of the noncriminal proceeding would not seriously injure the public interest, a court may be justified in deferring it.

In the case at bar defendants Devine and McHale have not been indicted and defendant McGuinness, who was indicted, has been acquitted. Defendants' only complaint is that the government refuses to state whether or not they are under criminal investigation. The policy of the United States Attorney's Office in this regard does not deprive defendants of the right to due process. Defendants are simply faced with the familiar choice of testifying or asserting the fifth amendment privilege. As this Court has held, "the discomfort of the defendant's position does not rise to the level of a deprivation of due process. Others have faced comparable circumstances; the choice may be unpleasant, but it is not illegal, and must be faced." Musella, 38 Fed. R. Serv. 2d (Callaghan) 426. The fact that defendants face a potentially unpleasant choice is no reason to stay discovery.

Defendant District Council's motion to vacate that portion of Magistrate Judge Katz's Order and Opinion denying the motion to compel is denied. The motions of defendants Devine, McHale and McGuinness to vacate that portion of the Order and Opinion denying the motion for a stay is denied. The case remains before Magistrate Judge Katz for supervision of pretrial matters.

Dated: New York, New York

February 3, 1992

CHARLES S. HAIGHT, JR.

U. S. D. J.

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